National Savings & Investments (NS&I) has launched new issues of its Guaranteed Growth and Guaranteed Income Bonds today, both with lower interest rates than before.

British Savings Bonds are fixed-term issues of NS&I's Guaranteed Growth Bonds and Guaranteed Income Bonds. They are available to new customers and those with existing Bonds which are due to mature. The new interest rate for Issue 86 on the one-year Growth option is 4.04% gross/AER, dropping from 4.18% gross/AER. The Income option now offers a 3.97% gross / 4.04% AER, down from 4.11% gross/4.18% AER. According to NS&I, today's changes will help it meet its Net Financing target while continuing to "balance the interests of savers, taxpayers and the broader financial services sector".

NS&I's Net Financing target is a yearly goal for the amount of money it must raise for the UK Government. This financial year's target is £12billion.

Guaranteed Growth Bonds are lump-sum investments that earn a fixed rate of interest over a set period of time. These accounts are designed to be held for the full term. Interest is calculated daily and added to the Bond on each investment anniversary.

Guaranteed Income Bonds are accounts that require a lump sum investment and provide monthly income at a fixed interest rate over a specified term. Interest is calculated daily and paid into the customer's nominated bank account.

Guaranteed Growth Bonds and Guaranteed Income Bonds are available to customers wanting a guaranteed rate for a fixed-term of one, two, three or five years. Like most fixed rate savings accounts, funds cannot be withdrawn early.

Savers will need a minimum investment of £500 and can invest a maximum of £1million per person in each Issue. After the fixed-term period, savers will have the choice to withdraw their cash or reinvest it in a new term.

Existing customers who have already received their 30-day maturity letter will have the Guaranteed Growth Bonds 4.18% gross/AER and the Guaranteed Income Bonds 4.11% gross/4.18% AER interest rates quoted in the letter honoured.

NS&I is one of the largest savings organisations in the UK, offering a range of savings and investments to more than 24 million customers.

All products offer 100% capital security as NS&I is backed by HM Treasury.